Vodafone Idea (Vi), the third-largest telecom operator in India, has paid less license fee (LF) and spectrum usage charge (SUC) for Q3 FY23. According to an ET report, the telco had paid, on average, Rs 600-Rs 800 crores as LF in the previous two quarters and about Rs 250 crore for SUC. However, in the December quarter, Vi only paid Rs 80 crore as LF and Rs 15 crore as SUC. One thing worth noting is that the telco made this payment after self-assessment of the dues. The Department of Telecommunications (DoT) will likely not scrutinise this payment as it audits the accounts only once a year. So while it is clear that Vi has not paid the entire amount for the quarter, the scrutiny won’t arrive until DoT audits and specifies just how less the telco has paid.
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How Much do Indian Telcos Pay as LF and SUC?
The Indian telecom operators must pay 8% of the adjusted gross revenue as the LF and around 3-4% as SUC each quarter. The Cellular Operators Association of India (COAI) has urged the government to reduce the LF to 1% so that the outgo of cash for the telcos reduces and could be invested more into network expansion activities.
As per the report, an official aware of the matter said that this move from the telco could be tactical. The telco could have paid less to reserve as much cash as possible for other things, and if it can secure funding in the next few months, it would clear the LF and SUC dues in one go, along with penalties, if any.
Vodafone Idea is currently struggling to raise funds. The telco needs money from its promoters. If the promoters don’t pitch in here, others won’t do so, either.